Brazil services recover in February as costs spike -PMI

SAO PAULO, March 5 (Reuters) - Activity in Brazil's services
sector rebounded in February from a January slump, a business
survey showed on Wednesday, as preparations for the World Cup
drove order growth and pushed up costs at the fastest pace in
three years.

As a result, HSBC's Composite Index for the
country, incorporating meager manufacturing activity, rose to
50.8 in February from 49.9 in January.

The return to growth helped ease concern about a stagnant
start to the year, which has put pressure on President Dilma
Rousseff as she prepares to run for re-election in October.

Still, economic expansion remains slight as tighter credit
and stubborn price pressures continue to limit the chances of a
more robust Brazilian recovery.

"Although the PMI report suggests that the economy
strengthened in February, we think it is far too early to
celebrate an improvement in economic conditions," said Andre
Loes, chief economist for HSBC in Brazil.

Anecdotal evidence suggested preparations for the soccer
World Cup, which Brazil is hosting in June and July this year,
helped drive strong demand as well as soaring prices in the
services sector.

Cost inflation for Brazilian service providers accelerated
in February to the sharpest increase in three years, driven by
the fastest rise ever recorded at hotels and restaurants.